Democrats Balk at Obama’s Fast-Track on Pacific Trade

Some Democrats in Congress, whose support Barack Obama needs for trade accords, want to put the brakes on a Pacific-region deal just as the president prepares to meet with leaders of nations drafting the pact.

A growing chorus of lawmakers is calling for trade negotiators to address issues including currency manipulation, food-safety standards and competition with state-backed competitors as the administration seeks “fast-track” authority to smooth eventual passage of the Trans-Pacific Partnership.

“I am worried the agreement will not in practice level the playing field for American companies,” trying to compete against state-run corporations, Representative Mike Michaud, a Maine Democrat, said in a Sept. 25 letter to U.S. Trade Representative Michael Froman.

Representatives Rosa DeLauro of Connecticut and James McDermott of Washington today plan outline their concerns about giving the White House fast-track authority. The fast-track approach, also known as Trade Promotion Authority, gives the president the ability to put an accord before lawmakers for an up-or-down vote.

That method was used to negotiate deals, including pacts with Korea, Panama and Colombia, before its expiration in 2007. The administration and business groups say fast-track can help assure trading partners that commitments made by the U.S. won’t unravel in Congressional negotiations.

Chamber Support

“We think every president should have this authority,” John Murphy, vice president of international affairs at the Washington-based U.S. Chamber of Commerce, said in a phone interview. The administration’s trade agenda makes the need for fast-track authority more tangible, he said.

While the U.S. and other nations seek an agreement on the Pacific-accord by the end of December, members of Congress have urged the administration to resolve concerns including American access to Japan’s auto markets and treatment of workers throughout the region before an approval vote.

A bipartisan group of 60 senators -- a bloc big enough to sink a trade accord -- on Sept. 24 urged the administration to include provisions to prevent currency manipulation in U.S. free-trade agreements. In addition to the 12-nation Pacific accord, the U.S. is negotiating a trade deal with the 28-nation European Union.

Currency Concerns

Froman said during a breakfast with reporters on Sept. 26 that while currency discussions aren’t part of the Pacific talks, the agency is working with domestic groups and lawmakers to address their concerns.

Obama is scheduled to meet with other leaders pushing the Trans-Pacific Partnership, known as the TPP, at an Asia-Pacific Economic Cooperation summit next week in Bali, Indonesia. A partial U.S. government shutdown in effect since Oct. 1 led Obama to cancel further stops in Malaysia and the Philippines. Secretary of State John Kerry will go in his stead.

Other countries negotiating the trade pact are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. If completed, the trade deal would cover an area with about $26 trillion in annual economic output, make it the largest trade deal in American history.

Obama in October 2011 signed legislation implementing the Colombia, Korea and Panama accords, first negotiated by the administration of George W. Bush. The administration and members of Congress worked to resolve lingering issues dealing with autos, labor and taxes, and the deals were approved by up-or-down votes.

‘No Surprises’

Senator Elizabeth Warren, a Massachusetts Democrat, urged her colleagues to vote against Froman’s confirmation in June until USTR released its negotiating texts.

“If members of the public do not have reasonable access to the terms of the agreements under negotiation, then they are unable to offer real input into the process,” she wrote in a June 13 letter.

“We’re in constant dialogue with Congress throughout our negotiation,” Froman told reporters last month. “Every member of Congress has access to the texts” of the agreements, he said. USTR has had hundreds of discussions about the TPP with members of Congress and their staffs since 2009, according to agency spokeswoman Carol Guthrie.

Froman said USTR shares information and gets input from groups that may be affected by the discussions to make sure there are “no surprises” in the trade negotiations.

Bottom Line

“You can’t release the text to everybody” from a negotiating standpoint, Ed Gerwin, president of consultancy Trade Guru LLC of Falls Church, Virginia, said in a phone interview. “It’s like buying a car and letting everyone in the shop know what your bottom line is.”

Consumer groups led by Public Citizen, labor unions and some Democrats have called on the administration to be more transparent about its negotiating positions with other nations, saying that people aren’t fully informed about what’s in the pacts that will affect them.

Gerwin said lawmakers have it within their power require greater transparency within an agreement and to give Obama fast-track authority.

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net